Auto Trader makes £128m H1 profit on £187m revenue

Manchester-based Auto Trader Group plc — the UK’s largest digital automotive marketplace — said on Thursday its profit before tax jumped 12% to £127.7 million on revenue up 6% to £186.7 million in the six months to September 30.

Auto Trader Group said it returned £69.8 million to shareholders (H1 2019: £80.8 million) through £27.2 million of share buy-backs (H1 2019: £42.9 million) plus dividends of £42.6 million (H1 2019: £37.9 million).

The firm declared an interim dividend of 2.4p, up from 2.1p at the same stage last year.

Auto Trader shares rose 1% to around 554p to give the firm a current stock market value of just over £5 billion.

Auto Trader Group CEO Trevor Mather said: “We have had a good first half and have seen an even greater number of car retailers opting to partner with Auto Trader to access our growing consumer audience. 

“We continue to be the clear market leader in used cars and have extended this into new cars, with over 30,000 brand new cars on Auto Trader being viewed by 1.6 million people in September alone. 

“Despite ongoing market uncertainty, the board is confident of meeting its growth expectations for the year.”

In its outlook, Auto Trader Group said: “In the first half, we have seen stronger than expected revenue growth from retailers, underpinned by product innovation.

“We expect good ARPR growth to continue, albeit with a slightly increased headwind from stock.

“We anticipate the average number of retailer forecourts to see modest year-on-year growth, largely through the acquisition of smaller retailers. 

“Consumer services growth is expected to moderate slightly as we lap a tougher comparative.

“Manufacturer and Agency revenue, which is 5% of total revenue, has been weak due to challenges facing these customers and we anticipate the rate of decline will accelerate.

“With KeeResources included, we anticipate total operating costs for the year to increase at low to mid-single digit percentage.

“The board is confident of meeting its growth expectations for the year.”

Analysts at Peel Hunt wrote: “This is a better set of results than we expected.

“Even as most listed car dealers in the UK are cutting their guidance and pointing to a difficult outlook, Auto Trader continues to be resilient, driven by continued new product innovations to support revenues and earnings growth.

“We believe in the long term growth for Auto Trader but going into H2, we do expect the car market to continue to be challenged with the political and macro uncertainty in the UK.

“We maintain our Hold at a target price of 570p.”